Futures point way higher before inflation

(Reuters) - U.S. stock futures pointed to a positive start for Wall Street on Wednesday ahead of a hotly-awaited reading on inflation seen as crucial to the fate of a two-week old downturn.

The data due at 8:30 a.m. ET is expected to show U.S. consumer prices increased solidly in January, boosted by rising gasoline and rents, but annual inflation growth is expected to have slowed to 1.9 percent, and to 1.7 percent on a core basis.

That might soothe some of the nerves over rising price pressure, and resulting expectations of higher interest rates and a less-bullish U.S. consumer, that sparked the initial selloff two Fridays ago.

Data on retail sales is also due at the same time, forecast to increase 0.2 percent in January after a 0.4 percent gain in December.

Following a slump into correction territory last week, the S&P 500 <.SPX> has recovered 3.2 percent in the past three sessions. It remains down 7.3 percent from a record high on Jan. 26 and is currently priced at levels from early December.

The CBOE Volatility index <.VIX>, known as Wall Street's fear gauge, whose impact on funds using computer-driven trading strategies is also seen as a contributing factor to the selloff, eased to a week low of 22.81, after shooting above 50 points in the peak of last week's falls.

VIX contracts are set to expire, potentially making the index more volatile than usual.

Among early movers, Chipotle Mexican Grill Inc <CMG.N> gained more than 10 percent in premarket trading after the company hired former Taco Bell head, Brian Niccol, as the new chief executive.

Of the 70 percent of the S&P 500 companies that have reported earnings, nearly 78 percent of them topped profit expectations, according to Thomson Reuters data. That is above the 72 percent average beat-rate in the past four quarters.